Plastic firms report mixed Q4 profit results

By Trang Nguyen
Fri, January 27, 2023 | 11:30 am GMT+7

Binh Minh Plastics Company recorded an all-time profit high in the fourth quarter of 2022, but Tien Phong Plastic JSC posted a heavy drop, and Vietnam Plastic Corporation incurred a loss.

Binh Minh Plastics Company (BMP) reported after-tax profit of VND248 billion ($10.58 million), up 117% year-on-year.

In 2022, BMP's after-tax profit hit VND696 billion ($29.68 million), up 224%, and net revenue reached VND5,808 billion ($247.68 million), up 27% over the previous year.

By December 31, 2022, BMP's assets stood at VND3,039 billion ($129.6 million), up 7% compared to the beginning of the year, of which short-term debt decreased by 24% to VND396.4 billion ($16.9 million).

Binh Minh UPVC plastic pipes. Photo courtesy of the company.

Binh Minh UPVC plastic pipes. Photo courtesy of the company.

Meanwhile, Tien Phong Plastic JSC (NTP) reported an after-tax profit of VND69 billion ($2.94 million) in Q4, down 42% year-on-year.

According to NTP, in Q4, the situation at its affiliates was negative and sales revenue of the parent company decreased sharply compared to Q4/2021.

In 2022, the company's net revenue reached VND5,685 billion ($242.44 million) and after-tax profit hit VND480 billion ($20.47 million), up 18% and 3% respectively.

As of December 31, 2022, NTP's total assets stood at VND5,064 billion ($215.95 million), up 3% compared to the beginning of the year. Of this, inventories accounted for the largest proportion with VND1,535 billion ($65.46 million), up 42% compared to the beginning of the year.

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Recording poor business results, Vietnam Plastic Corporation reported an after-tax profit of negative VND15.3 billion ($652,500) in Q4, compared to the same period last year when it posted VND4.7 billion ($200,000).

The company's (VNP) net revenue reached VND9.9 billion ($422,200), down 8.2 times year-on-year.

In 2022, VNP recorded net revenue of VND209 billion ($8.91 million) and after-tax profit of VND31 billion ($1.32 million), down 39% and 58% year-on-year, respectively.

As of December 31, 2022, the company's assets stood at VND422 billion ($17.99 million), down 7% compared to the beginning of the year. Short-term assets reached VND240 billion ($10.23 million), down nearly 5% compared to the beginning of the year, of which cash and cash equivalents were VND8.1 billion ($345,400), down 54%, while inventories hit VND89.4 billion ($3.81 million), up 2 times.

In a construction plastic industry report, Vietcombank Securities (VCBS) predicts that the price of PVC resin, the main material for making plastic pipes and wires, in the second half of 2022 and in 2023 will remain at a low price level in the range of $800-1,000 per ton, helping to improve the profit margin of plastic enterprises.

According to VCBS, PVC accounts for 70% of the cost of construction plastic sales. Vietnam is having to import PVC due to lack of supply, so prices fluctuate on global supply and demand.

This is mainly due to a supply recovery in the U.S. and global inventories rising strongly due to the expansion of major enterprises. Large manufacturers in India, the U.S. and China invested in expanding PVC production in 2022. From now until 2026, PVC output is forecast to increase by 17% to 70 million tons per year.

China accounts for 50% of PVC production and consumption worldwide. PVC demand has declined in China due to a sluggish real estate market, of which PVC demand for construction in this country accounts for 62%.

VCBS believes that by the end of 2023, demand for PVC will continue to be weak, with the number of projects starting in China low (plastic pipes are generally used when projects are completed, which can take more than one year from the start of construction).

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